The principle of pawnbroking was practised in Biblical times. So why is it still going strong?

Just before World War I, there were more pawnbrokers in the city of Birmingham than pubs.

In those days, a housewife might pawn her husband's best suit and boots, or her wedding ring, on a Monday before buying them back with the Friday pay-packet in time for her husband to wear them to the pub and to church.

In the cash-economy of an industrial city known as the workshop of the empire, that's how people got by.

Price rise

In 2005, Birmingham is no longer the workshop of an empire, but the city still has a thriving pawnbroking sector.

Seven million Britons have no access to bank or building society credit and pawnbroking is now the fastest growing part of the finance industry.

The practice declined after the war but has risen in the last 20 years, partly due to the Consumer Credit Act 1974, which enforced regulations while lifting other restrictions.

Pawning is a loan set against an item like jewellery left by the borrower, usually over a three or six-month period, with the conditions set out in a credit agreement. Interest is usually 7%.

I can't get cash anywhere else, but I know I can sell my personal goods to get money

Kevin

Recently there has been a growth in "sell-and-buy-back" stores, where the borrower sells the item with an option to buy it back after 28 days at a higher price. It is not interest but a charge, which can be as high as 30% of the sale price.

If the borrower does not buy the property back, it is sold in the shop.

Birmingham is home to the biggest buy-back store in Europe, Cash Converters, which has half a million customers a week.

One man sold his mobile phone on a Wednesday for £10 and bought it back two days later for £17.
A high price, but few of the borrowers have complaints and many say it is a useful service.

"I need some cash to last me until the end of the month," says Kevin, as he tried to sell his amplifier and speakers. "I can't get cash anywhere else, but I know I can sell my personal goods to get money."

Vernon needs cash to buy Big Issues which he sells

Denied access to bank or card credit, Vernon Burgess says he would not survive without his local buy-back shop. Vernon grew up and still lives in Birmingham, and has a history of homelessness and mental illness.

He gets a monthly disability living allowance, but he has to supplement this to support himself and his 10-year-old son, so he sells the Big Issue. As an official badged seller, he buys the magazines for 50p each from his local Big Issue office before he can sell them on at a profit.

To raise the money for the magazines, he regularly takes his son's games console to his local buy-back shop, Instore Direct, where manager Mary Daly says she gives him a good price.

She admits in an ideal world her shop would not exist, but thinks it makes things easier for customers.

"If we didn't have shops like this, I dread to think what the crime rate would be like," she says.

Chloe Rawlings is assistant producer of Skint, a series which begins on BBC One at 2235GMT on Tuesday, 22 March 2005.